The cheap populism over the NSA scandal shows that Brussels is more interested
in political point-scoring than economic reality

The EU bangs on consistently about the pitfalls of populism, denouncing it as an adversary in the drive to push forward the project of European integration. But it turns out that populism isn’t such anathema to Brussels apparatchiks after all, given their exploiting of the Prism saga to resurrect contentious data protection proposals which have until now been stalling – for very good reason.

The legislation has come to a virtual standstill in no small part because of the costs and red tape that would be attached. The Government has estimated the extra regulatory burden could increase business costs here by as much as £360 million, and the Dutch put that figure at a whopping €1.5 billion. For the thousands of small and medium sized enterprises who are so integral to our economic recovery, these are costs which could very well put them out of business. The expenses incurred by compliance can often be borne by corporate giants, but for many SMEs and start-ups, this would clearly be a case of Single Market regulation outweighing any accrued benefits.

It beggars belief that the compelling case for digging our heels on this one could simply be tossed aside by Eurocrats playing to the gallery, particularly when there is no proof that NSA surveillance of Europe would not have happened were these particular data rules in place. In a speech this week, Viviane Reding went on the self-righteous and sanctimonious offensive, drawing on Prism to excoriate the legitimate concerns of Member States which have seen the negotiating process she wanted to expedite properly and rightly scrutinised. She could hardly contain her elation that the pace, as she saw it, was now “going to be accelerated”.

This underscores the impatient disdain that many Brussels bureaucrats are naturally predisposed to when it comes to the right and role of national governments – and by extension their parliaments- to debate and object to EU legislation. The costs of the Commission’s overly prescriptive fixation on “the right to be forgotten” are not going to disappear simply because Viviane Reding has found a populist means of boosting support for her cause. The concerns of many over the balance between protection for citizens against heavy-handed (and costly) prescription don’t seem to resonate with the Commissioner. Her thinly veiled warning that she is “confident the proposals will now quickly be adopted” reveal a contempt for debate and divergent views.

Angela Merkel’s rapid capitulation this week is perhaps part of the reason for Brussels’ emboldened and hardened rhetoric. It is unsurprising Merkel now has a bee in her bonnet, as the claims of NSA monitoring were reported and alleged to have taken place in Germany. Additionally, the looming spectre of elections means she is under pressure to talk tough on what has become a hot button issue for her domestically. But where Germany leads on a point of political electioneering, the UK would be wise to retain a cool head that has prevailed in the debate so far and not simply follow.

If Brussels is able to play the populist in order to weaken opposition to its plans, it would be further evidence of the EU’s propensity for prioritising politics ahead of economics. There is a threat to companies whose core activity is not data processing, and the Federation of Small Businesses has warned that the proposals will strike a significant blow to innovation and growth.

We need to renegotiate our relationship with the EU to ensure that it provides for flexibility in its regulation – flexibility that SME’s desperately need – and recognises that ever closer union in the form of harmonisation at all costs is not in interests of Britain and many of its other constituent parts. Refusal to reflect this needed change threatens the economic viability of the EU as a whole for years to come and is a surefire way to see the UK drift towards the door.